Correlation Between LYFT and Ferrovial
Can any of the company-specific risk be diversified away by investing in both LYFT and Ferrovial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LYFT and Ferrovial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LYFT Inc and Ferrovial, you can compare the effects of market volatilities on LYFT and Ferrovial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LYFT with a short position of Ferrovial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LYFT and Ferrovial.
Diversification Opportunities for LYFT and Ferrovial
Very poor diversification
The 3 months correlation between LYFT and Ferrovial is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding LYFT Inc and Ferrovial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrovial and LYFT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LYFT Inc are associated (or correlated) with Ferrovial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrovial has no effect on the direction of LYFT i.e., LYFT and Ferrovial go up and down completely randomly.
Pair Corralation between LYFT and Ferrovial
If you would invest 1,580 in LYFT Inc on September 1, 2024 and sell it today you would earn a total of 156.00 from holding LYFT Inc or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
LYFT Inc vs. Ferrovial
Performance |
| Timeline |
| LYFT Inc |
| Ferrovial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LYFT and Ferrovial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LYFT and Ferrovial
The main advantage of trading using opposite LYFT and Ferrovial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LYFT position performs unexpectedly, Ferrovial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ferrovial will offset losses from the drop in Ferrovial's long position.The idea behind LYFT Inc and Ferrovial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ferrovial vs. NETGEAR | Ferrovial vs. Mind Technology | Ferrovial vs. Arrow Electronics | Ferrovial vs. Semtech |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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